FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

              (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

                 For the quarterly period ended March 31, 2001
   --------------------------------------------------------------------------

                                       OR

             ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
                     OF THE SECURITIES EXCHANGE ACT of 1934

For the transition period from _________________________ to ____________________


                             Commission file number
                                     0-21558
                     --------------------------------------


                            CNL Income Fund XII, Ltd.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


                       Florida                                   59-3078856
---------------------------------------------- ---------------------------------
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                               Identification No.)


450 South Orange Avenue
Orlando, Florida                                                    32801
---------------------------------------------- ---------------------------------
      (Address of principal executive offices)                   (Zip Code)


Registrant's telephone number
(including area code)                                          (407) 540-2000
                                               ---------------------------------


Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No _________





<PAGE>


                                    CONTENTS





Part I                                                             Page
                                                                   ----

   Item 1.    Financial Statements:

                  Condensed Balance Sheets                          1

                  Condensed Statements of Income                    2

                  Condensed Statements of Partners' Capital         3

                  Condensed Statements of Cash Flows                4

                  Notes to Condensed Financial Statements           5-7

   Item 2.    Management's Discussion and Analysis of Financial
                  Condition and Results of Operations               8-12

   Item 3.   Quantitative and Qualitative Disclosures About
                  Market Risk                                       12

Part II

   Other Information                                                13-14















<PAGE>



                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                           CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
<S><C>
                                                                               March 31,              December 31,
                                                                                  2001                    2000
                                                                           -------------------     -------------------
                               ASSETS

   Land and buildings on operating leases, less
       accumulated depreciation of $2,635,026 and
       $2,525,455, respectively                                                  $ 21,895,331            $ 21,239,166
   Net investment in direct financing leases                                        8,927,300               9,740,755
   Investment in joint ventures                                                     4,645,216               4,673,593
   Mortgage note receivable                                                                --                  45,375
   Cash and cash equivalents                                                        1,487,935               1,161,018
   Certificates of deposit                                                            519,734                 511,277
   Receivables, less allowance for doubtful accounts
       of $22,505 and $30,338, respectively                                            11,170                 192,518
   Due from related parties                                                            19,329                  28,054
   Prepaid expenses                                                                    10,390                  30,903
   Lease costs, less accumulated amortization
       of $12,826 and $11,490, respectively                                            49,597                  50,933
   Accrued rental income, less allowance for doubtful
       accounts of $89,770 and $161,604, respectively                               2,471,630               2,645,628
                                                                           -------------------     -------------------

                                                                                 $ 40,037,632            $ 40,319,220
                                                                           ===================     ===================

                  LIABILITIES AND PARTNERS' CAPITAL

   Accounts payable                                                                $   81,720              $   39,360
   Accrued and escrowed real estate taxes payable                                      30,541                   8,853
   Distributions payable                                                              956,252                 956,252
   Due to related parties                                                             119,850                  22,808
   Rents paid in advance and deposits                                                 148,128                  85,863
                                                                           -------------------     -------------------
       Total liabilities                                                            1,336,491               1,113,136

   Partners' capital                                                               38,701,141              39,206,084
                                                                           -------------------     -------------------

                                                                                 $ 40,037,632            $ 40,319,220
                                                                           ===================     ===================

See accompanying notes to condensed financial statements.




<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                         CONDENSED STATEMENTS OF INCOME


                                                                                          Quarter Ended
                                                                                            March 31,
                                                                                     2001               2000
                                                                                ---------------    ---------------
Revenues:
    Rental income from operating leases                                             $  746,478          $ 705,739
    Adjustments to accrued rental income                                              (297,747 )               --
    Earned income from direct financing leases                                         265,773            296,499
    Contingent rental income                                                             4,123                767
    Interest and other income                                                           28,733             45,489
                                                                                ---------------    ---------------
                                                                                       747,360          1,048,494
                                                                                ---------------    ---------------

Expenses:
    General operating and administrative                                               144,054             48,581
    Professional services                                                               31,497             14,422
    Management fees to related parties                                                  10,669             10,678
    Real estate taxes                                                                   13,811                 --
    State and other taxes                                                               48,174             20,703
    Depreciation and amortization                                                      110,907             97,281
    Transaction costs                                                                       --             46,395
                                                                                ---------------    ---------------
                                                                                       359,112            238,060
                                                                                ---------------    ---------------

Income Before Equity in Earnings of Joint Ventures
    and Gain on Sale of Assets                                                         388,248            810,434

Equity in Earnings of Joint Ventures                                                    63,061             78,072

Gain on Sale of Assets                                                                      --            147,633
                                                                                ---------------    ---------------
                                                                                                   ---------------

Net Income                                                                          $  451,309         $1,036,139
                                                                                ===============    ===============

Allocation of Net Income:
    General partners                                                                   $    --             $   --
    Limited partners                                                                   451,309          1,036,139
                                                                                ---------------    ---------------

                                                                                    $  451,309         $1,036,139
                                                                                ===============    ===============

Net Income Per Limited Partner Unit                                                  $    0.10           $   0.23
                                                                                ===============    ===============

Weighted Average Number of Limited
    Partner Units Outstanding                                                        4,500,000          4,500,000
                                                                                ===============    ===============

See accompanying notes to condensed financial statements.



<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                    CONDENSED STATEMENTS OF PARTNERS' CAPITAL


                                                                             Quarter Ended           Year Ended
                                                                               March 31,            December 31,
                                                                                  2001                  2000
                                                                           -------------------    ------------------

General partners:
    Beginning balance                                                             $   259,109            $  259,109
    Net income                                                                             --                    --
                                                                           -------------------    ------------------
                                                                                      259,109               259,109
                                                                           -------------------    ------------------

Limited partners:
    Beginning balance                                                              38,946,975            38,951,767
    Net income                                                                        451,309             3,820,216
    Distributions ($0.21 and $0.85 per
       limited partner unit, respectively)                                           (956,252 )          (3,825,008 )
                                                                           -------------------    ------------------
                                                                                   38,442,032            38,946,975
                                                                           -------------------    ------------------

Total partners' capital                                                          $ 38,701,141          $ 39,206,084
                                                                           ===================    ==================

See accompanying notes to condensed financial statements.

<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                       CONDENSED STATEMENTS OF CASH FLOWS


                                                                                     Quarter Ended
                                                                                       March 31,
                                                                               2001                 2000
                                                                          ----------------     ---------------

Increase (Decrease) in Cash and Cash Equivalents

    Net Cash Provided by Operating Activities                                  $1,239,409          $1,073,223
                                                                          ----------------     ---------------

    Cash Flows from Investing Activities:
       Proceeds from sale of assets                                                    --             791,450
       Increase in restricted cash                                                     --            (791,450 )
       Collections on mortgage note receivable                                     43,760               2,247
                                                                          ----------------     ---------------
              Net cash provided by investing
                  activities                                                       43,760               2,247
                                                                          ----------------     ---------------

    Cash Flows from Financing Activities:
       Distributions to limited partners                                         (956,252 )          (956,252 )
                                                                          ----------------     ---------------
              Net cash used in financing activities                              (956,252 )          (956,252 )
                                                                          ----------------     ---------------

Net Increase (Decrease) in Cash and Cash
    Equivalents                                                                   326,917             119,218

Cash and Cash Equivalents at Beginning of Quarter                               1,161,018           1,870,366
                                                                          ----------------     ---------------

Cash and Cash Equivalents at End of Quarter                                    $1,487,935          $1,989,584
                                                                          ================     ===============

Supplemental Schedule of Non-Cash Financing
    Activities:

       Distributions declared and unpaid at end of
          quarter                                                               $ 956,252           $ 956,252
                                                                          ================     ===============

See accompanying notes to condensed financial statements.

</TABLE>





<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                     Quarters Ended March 31, 2001 and 2000


1.       Basis of Presentation:

         The accompanying unaudited condensed financial statements have been
         prepared in accordance with the instructions to Form 10-Q and do not
         include all of the information and note disclosures required by
         generally accepted accounting principles. The financial statements
         reflect all adjustments, consisting of normal recurring adjustments,
         which are, in the opinion of management, necessary to a fair statement
         of the results for the interim periods presented. Operating results for
         the quarter ended March 31, 2001, may not be indicative of the results
         that may be expected for the year ending December 31, 2001. Amounts as
         of December 31, 2000, included in the financial statements, have been
         derived from audited financial statements as of that date.

         These unaudited financial statements should be read in conjunction with
         the financial statements and notes thereto included in Form 10-K of CNL
         Income Fund XII, Ltd. (the "Partnership") for the year ended December
         31, 2000.

2.       Reclassification:
         ----------------

         Certain items in the prior year's financial statements have been
         reclassified to conform to 2001 presentation. These reclassifications
         had no effect on total partners' capital or net income.

3.       Land and Buildings on Operating Leases:

         Effective January 2001, the Partnership terminated the lease relating
         to its property in Albany, Georgia. As a result, the Partnership
         reclassified the building portion of this asset from net investment in
         direct financing lease to building on operating lease. In accordance
         with statement of Financial Accounting Standards No. 13, "Accounting
         for Leases," the Partnership recorded the reclassified asset at the
         lower of original cost, present fair value, or present carrying value.
         No loss on reclassification of direct financing lease was recorded for
         financial reporting purposes. In connection therewith, the Partnership
         entered into a new lease with a new tenant with lease terms
         substantially the same as the Partnership's other leases.

4.       Investment in Joint Ventures:
         ----------------------------

         In March 2001, Middleburg Joint Venture, in which the Partnership owns
         a 87.54% interest, sold its property to the tenant, in accordance with
         the purchase option under the lease agreement, for $1,900,000. This
         resulted in a loss to the joint venture of approximately $61,900 for
         financial reporting purposes.


<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                     Quarters Ended March 31, 2001 and 2000


4.       Investment in Joint Ventures - Continued:
         ----------------------------------------

         The following presents the combined, condensed financial information
         for all of the Partnerships investments in joint ventures at:

<TABLE>
<CAPTION>
<S><C>
                                                                           March 31,              December 31,
                                                                             2001                     2000
                                                                     ---------------------     -------------------

           Land and buildings on operating leases,
                less accumulated depreciation and
                allowance for loss on assets                                $   5,600,341            $  6,153,743
           Net investment in direct financing lease, less
                allowance for loss on assets                                      645,171               1,926,938
           Cash                                                                 1,966,636                  85,033
           Receivables, less allowance for doubtful
                accounts                                                           25,400                     193
           Prepaid expenses                                                         2,138                      --
           Accrued rental income                                                  151,268                 294,356
           Other assets                                                                --                     741
           Liabilities                                                             38,868                  54,005
           Partners' capital                                                    8,352,086               8,406,999
           Revenues                                                               238,049                 779,865
           Loss on sale of assets                                                 (61,864 )                    --
           Net income                                                             142,203                 658,303

</TABLE>


         The Partnership recognized income totaling $63,061 and $78,072 for the
         quarters ended March 31, 2001 and 2000, respectively, from these joint
         ventures.

4.       Mortgage Note Receivable:
         ------------------------

         During 1999, the Partnership had accepted a promissory note in
         connection with the 1999 sale of one of its properties. During the
         quarter ended March 31, 2001, the Partnership collected the outstanding
         principal and interest balance of $45,375 relating to the promissory
         note accepted in connection with the sale of the property in Morganton,
         North Carolina.


<PAGE>


                            CNL INCOME FUND XII, LTD.
                         (A Florida Limited Partnership)
                     NOTES TO CONDENSED FINANCIAL STATEMENTS
                     Quarters Ended March 31, 2001 and 2000


5.       Subsequent Event:
         ----------------

         In April 2001, Middleburg Joint Venture, in which the Partnership owned
         a 87.54% interest, was dissolved in accordance with the joint venture
         agreement. As a result, the Partnership received approximately
         $1,704,481 representing its 87.54% share of the liquidation proceeds of
         the joint venture. No gain or loss on the dissolution of the joint
         venture was recorded.

         In April 2001, the Partnership invested approximately $1,674,000 of the
         liquidation proceeds related to the dissolution of Middleburg Joint
         Venture for an approximate 80 percent interest in a joint venture
         arrangement, CNL VIII, X, XII Kokomo Joint Venture, with CNL Income
         Fund VIII, Ltd. and CNL Income Fund X, Ltd., each of which is a Florida
         limited partnership and an affiliate of the general partners. The joint
         venture acquired the property from CNL BB Corp., an affiliate of the
         general partners who had purchased and temporarily held title to the
         property in order to facilitate the acquisition of the property by the
         joint venture. The purchase price paid by the joint venture represented
         the costs incurred by the affiliate to acquire the property, including
         closing costs. In connection therewith, the joint venture entered into
         a long term, triple-net lease with terms substantially the same as the
         Partnership's other leases.



<PAGE>


ITEM 2.       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
              RESULTS OF OPERATIONS

         CNL Income Fund XII, Ltd. (the "Partnership") is a Florida limited
Partnership that was organized on August 20, 1991, to acquire for cash, either
directly or through joint venture and tenancy in common arrangements, both newly
constructed and existing restaurants, as well as Properties upon which
restaurants were to be constructed (the "Properties"), which are leased
primarily to operators of national and regional fast-food and family-style
restaurant chains. The leases are generally triple-net leases, with the lessees
responsible for all repairs and maintenance, property taxes, insurance and
utilities. As of March 31, 2001, the Partnership owned 47 Properties, which
included interests in five Properties owned by joint ventures in which the
Partnership is a co-venturer and one Property owned with affiliates of the
general partners as tenants-in-common.

Capital Resources

         The Partnership's primary source of capital for the quarters ended
March 31, 2001 and 2000 was cash from operations (which includes cash received
from tenants, distributions from joint ventures, and interest and other income
received, less cash paid for expenses). Cash from operations was $1,239,409 and
$1,073,223 for the quarters ended March 31, 2001 and 2000, respectively. The
increase in cash from operations for the quarter ended March 31, 2001, as
compared to the quarter ended March 31, 2000, was primarily a result of changes
in the Partnership's working capital.

         Other sources and uses of capital included the following during the
quarter ended March 31, 2001.

         During 1999, the Partnership had accepted a promissory note in
connection with the 1999 sale of one of its Properties. During the quarter ended
March 31, 2001, the Partnership collected the outstanding principal balance of
$43,760 relating to the promissory note accepted in connection with the sale of
the Property in Morganton, North Carolina.

         In March 2001, Middleburg Joint Venture, in which the Partnership owns
a 87.54% interest, sold its Property to the tenant in accordance with the option
under its lease agreement to purchase the Property, for $1,900,000, resulting in
a loss to the joint venture of approximately $61,900 for financial reporting
purposes. In April 2001, Middleburg Joint Venture was dissolved in accordance
with the joint venture agreement. As a result, the Partnership received
approximately $1,704,481 representing its 87.54% share of the liquidation
proceeds of the joint venture. No gain or loss on the dissolution of the joint
venture was recorded. In April 2001, the Partnership used these proceeds to
invest in a joint venture arrangement, CNL VIII, X, XII Kokomo Joint Venture, to
acquire a Property in Kokomo, Indiana with CNL Income Fund VIII, Ltd. and CNL
Income Fund X, Ltd., each of which is a Florida limited partnership and an
affiliate of the general partners. The Partnership contributed approximately
$1,674,000 to acquire the restaurant Property for an approximate 80 percent
interest in the profits and losses of the joint venture.

         Currently, cash reserves, rental income from the Partnership's
Properties and any amounts collected from the promissory note are invested in
money market accounts or other short-term, highly liquid investments, such as
demand deposit accounts at commercial banks, money market accounts and
certificates of deposit with less than a 30-day maturity date, pending the
Partnership's use of such funds to pay Partnership expenses or to make
distributions to the partners. At March 31, 2001, the Partnership had $2,007,669
(including certificates of deposit in the amount of $519,734) invested in such
short-term investments, as compared to $1,672,295 (including certificates of
deposit in the amount of $511,277) at December 31, 2000. The increase in cash
and cash equivalents for the quarter ended March 31, 2001, as compared to
December 31, 2000 was attributable to the Partnership receiving the payoff of
the promissory note, as described above, collection of accounts receivable at
December 31, 2000, and an increase in rents paid in advance at March 31, 2001,
as compared to December 31, 2000. The funds remaining at March 31, 2000, after
payment of distributions and other liabilities, will be used to meet the
Partnership's working capital needs.

Short-Term Liquidity

         The Partnership's short-term liquidity requirements consist primarily
of the operating expenses of the Partnership.

         The Partnership's investment strategy of acquiring Properties for cash
and leasing them under triple-net leases to operators who meet specified
financial standards minimizes the Partnership's operating expenses. The general
partners believe that the leases will continue to generate cash flow in excess
of operating expenses.

         The general partners have the right, but not the obligation, to make
additional capital contributions if they deem it appropriate in connection with
the operations of the Partnership.

         The Partnership generally distributes cash from operations remaining
after the payment of operating expenses of the Partnership, to the extent that
the general partners determine that such funds are available for distribution.
Based on current cash from operations the Partnership declared distributions to
the limited partners of $956,252 for each of the quarters ended March 31, 2001
and 2000. This represents distributions for each applicable quarter of $0.21 per
unit. No distributions were made to the general partners for the quarters ended
March 31, 2001 and 2000. No amounts distributed to the limited partners for the
quarters ended March 31, 2001 and 2000 are required to be or have been treated
by the Partnership as a return of capital for purposes of calculating the
limited partners' return on their adjusted capital contributions. The
Partnership intends to continue to make distributions of cash available for
distribution to the limited partners on a quarterly basis.

         Total liabilities of the Partnership increased to $1,336,491 at March
31, 2001, from $1,113,136 at December 31, 2000, primarily as a result of an
increase in rents paid in advance and amounts due to related parties at March
31, 2001. The general partners believe that the Partnership has sufficient cash
on hand to meet its current working capital needs.

Long-Term Liquidity

         The Partnership has no long-term debt or other long-term liquidity
requirements.



<PAGE>


Results of Operations

         During the quarter ended March 31, 2000, the Partnership owned and
leased 42 wholly owned Properties (which included two Properties sold during
2000) and during the quarter ended March 31, 2001, the Partnership owned and
leased 41 wholly owned Properties to operators of fast-food and family-style
restaurant chains. In connection therewith, during the quarters ended March 31,
2001 and 2000, the Partnership earned $714,504 and $1,002,238, respectively, in
rental income from operating leases (net of adjustments to accrued rental
income) and earned income from direct financing leases from these Properties.
The decrease in rental and earned income during the quarter ended March 31,
2001, as compared to the quarter ended March 31, 2000, was partially due to the
fact that during the quarter ended March 31, 2001, the tenant of the Property in
Albany, Georgia terminated its lease. As a result of the lease termination, the
Partnership reversed approximately $155,300 in accrued rental income relating to
this Property. The accrued rental income was the accumulated amount of non-cash
accounting adjustments previously recorded in order to recognize future
scheduled rent increases as income evenly over the term of the lease. The
Partnership simultaneously re-leased the Property to a new tenant with lease
terms substantially the same as the Partnership's other leases. In addition, the
decrease in rental and earned income during the quarter ended March 31, 2001,
was partially attributable to the fact that in April 2001, the tenant of the
Property in Winter Haven, Florida vacated the Property and ceased making rental
payments on this Property. As a result, during the quarter ended March 31, 2001,
the Partnership reversed approximately $142,500 in accrued rental income
relating to this Property. The Partnership will not recognize any rental and
earned income from this Property until the Property is re-leased or the Property
is sold and the proceeds are reinvested in an additional Property. The general
partners are currently seeking a replacement tenant or purchaser for this
Property. Until such time as the Property is re-leased, the general partner's
rental and earned income will remain at reduced levels. The general partners
will continue to pursue collection of past due rental amounts relating to these
Properties and will recognize such amounts as income if collected. No such
amounts were written off during the quarter ended March 31, 2000.

         In 1998, Long John Silver's, Inc. filed for bankruptcy, rejected the
leases relating to three of the eight Properties it leased and ceased making
rental payments to the Partnership. Subsequently, two of the three Properties
with rejected leases were sold and one was re-leased to a new tenant. In 1999,
Long John Silver's, Inc. assumed and affirmed its five remaining leases and the
Partnership has continued to receive rental payments relating to these five
leases. The decrease in rental and earned income during the quarter ended March
31, 2001, as compared to the quarter ended March 31, 2000, was partially
attributable to the fact that during 2000, the Partnership received
approximately $55,600 in bankruptcy proceeds relating to the Properties whose
lease were rejected in 1998, as described above. No such proceeds were received
during the quarter ended March 31, 2001.

         In addition, rental income decreased during the quarter ended March 31,
2001, as compared to the quarter ended March 31, 2000, as a result of the 2000
sales of the Properties in Bradenton, Florida and Cleveland, Tennessee. The
decrease was partially offset by an increase in rental and earned income during
the quarter ended March 31, 2001 as a result of the Partnership reinvesting a
portion of these net sales proceeds in a Property in Pooler, Georgia in April
2000.

         The decrease in rental and earned income during the quarter ended March
31, 2001 was partially offset by the fact that during the quarter ended March
31, 2000, the Partnership established an allowance for doubtful accounts for
past due rental amounts relating to several Properties in accordance with the
Partnership's policy. No such allowance was established during the quarter ended
March 31, 2001 relating to these Properties.

         In addition, during the quarters ended March 31, 2001 and 2000, the
Partnership owned and leased six Properties (including one Property which was
sold in 2001) indirectly through joint venture arrangements and one Property as
tenants-in-common with the affiliates of the general partners. In connection
therewith, during the quarters ended March 31, 2001 and 2000, the Partnership
earned $63,061 and $78,072, respectively, attributable to net income earned by
joint ventures. The decrease in net income earned by these joint ventures during
the quarter ended March 31, 2001, as compared to the quarter ended March 31,
2000, was primarily attributable to the fact that in March 2001, Middleburg
Joint Venture in which the Partnership owns a 87.54% interest, recognized a loss
of approximately $61,900 for financial reporting purposes as the result of the
sale of its Property, as described above in "Capital Resources." The decrease in
net income earned by these joint ventures during the quarter ended March 31,
2001 was partially offset by the fact that in August 2000, the Partnership
invested in a Property in Colorado Springs, Colorado, as tenants-in-common with
CNL Income Fund VII, Ltd., a Florida limited partnership and an affiliate of the
general partners.

         Operating expenses, including depreciation and amortization expense,
were $359,112 and $238,060 for the quarters ended March 31, 2001 and 2000,
respectively. The increase in operating expenses during the quarter ended March
31, 2001, as compared to the quarter ended March 31, 2000, was primarily
attributable to an increase in the costs incurred for administrative expenses
for servicing the Partnership and its Properties, as permitted by the
Partnership agreement. In addition, the increase in operating expenses during
the quarter ended March 31, 2001, was partially attributable to an increase in
state taxes incurred by the Partnership due to changes in the tax laws of a
state in which the Partnership conducts business.

         Operating expenses also increased during the quarter ended March 31,
2001, as compared to the quarter ended March 31, 2000, due to an increase in
depreciation expense related to the Partnership's Property in Albany, Georgia.
The Partnership terminated the lease related to this Property and reclassified
the asset from net investment in direct financing lease to land and building on
operating lease. The Property was re-leased to a new tenant in January 2001. In
accordance with Statement of Financial Accounting Standards No. 13, "Accounting
for Leases," the Partnership recorded the reclassified asset at the lower of
original cost, present fair value or present carrying amount. No loss on
reclassification was recorded during the quarter ended March 31, 2001. In
addition, the Partnership incurred certain expenses such as real estate taxes,
insurance and maintenance relating to the Property in Winter Haven, Florida as a
result of the tenant vacating the Property. The Partnership will continue to
incur these expenses until a new tenant or purchaser is located.

         The increase in operating expenses during the quarter ended March 31,
2001 was partially offset by the fact that during the quarter ended March 31,
2000, the Partnership incurred $46,395 in transaction costs related to the
general partners retaining financial and legal advisors to assist them in
evaluating and negotiating the proposed merger with CNL American Properties
Fund, Inc. ("APF"). On March 1, 2000, the general partners and APF mutually
agreed to terminate the merger. No such expenses were incurred during the
quarter ended March 31, 2001.

         As a result of the sale of the Property in Cleveland, Tennessee, the
Partnership recorded a gain of $147,633 for financial reporting purposes during
the quarter ended March 31, 2000. No Properties were sold during the quarter
ended March 31, 2001.


ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         Inapplicable.

<PAGE>


                           PART II. OTHER INFORMATION


Item 1.    Legal Proceedings.   Inapplicable.
           ------------------

Item 2.    Changes in Securities.       Inapplicable.
           --------------------------

Item 3.    Default upon Senior Securities.   Inapplicable.
           -------------------------------

Item 4.    Submission of Matters to a Vote of Security Holders.   Inapplicable.
           ----------------------------------------------------

Item 5.    Other Information.        Inapplicable.
           ------------------

Item 6.    Exhibits and Reports on Form 8-K.
           ---------------------------------

(a)      Exhibits

                      3.1     Affidavit and  Certificate of Limited  Partnership
                              of CNL Income Fund XII, Ltd.  (Included as Exhibit
                              3.2 to Registration  Statement No.  33-43278-01 on
                              Form S-11 and incorporated herein by reference.)

                      4.1     Affidavit and  Certificate of Limited  Partnership
                              of CNL Income Fund XII, Ltd.  (Included as Exhibit
                              3.2 to Registration  Statement No.  33-43278-01 on
                              Form S-11 and incorporated herein by reference.)

                      4.2     Amended   and   Restated   Agreement   of  Limited
                              Partnership of CNL Income Fund XII, Ltd. (Included
                              as  Exhibit  4.2  to  Form  10-K  filed  with  the
                              Securities  and Exchange  Commission  on April 15,
                              1993, and incorporated herein by reference.)

                      10.1    Management  Agreement between CNL Income Fund XII,
                              Ltd.  and  CNL  Investment  Company  (Included  as
                              Exhibit   10.1  to  Form  10-K   filed   with  the
                              Securities  and Exchange  Commission  on April 15,
                              1993, and incorporated herein by reference.)

                      10.2    Assignment  of  Management   Agreement   from  CNL
                              Investment  Company to CNL Income  Fund  Advisors,
                              Inc.  (Included as Exhibit 10.2 to Form 10-K filed
                              with the  Securities  and Exchange  Commission  on
                              March  31,  1995,  and   incorporated   herein  by
                              reference.)

                      10.3    Assignment of Management Agreement from CNL Income
                              Fund  Advisors,  Inc. to CNL Fund  Advisors,  Inc.
                              (Included  as Exhibit 10.3 to Form 10-K filed with
                              the Securities and Exchange Commission on April 1,
                              1996, and incorporated herein by reference.)

                      (b)     Reports on Form 8-K

                                    No reports on Form 8-K were filed during the
quarter ended March 31, 2001.


<PAGE>



                                   SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

         DATED this 11th day of May, 2001.


             By:       CNL INCOME FUND XII, LTD.
                       General Partner


                      By:            /s/ James M. Seneff, Jr.
                                     -------------------------------------------
                                     JAMES M. SENEFF, JR.
                                     Chief Executive Officer
                                     (Principal Executive Officer)


                      By:            /s/ Robert A. Bourne
                                     -------------------------------------------
                                     ROBERT A. BOURNE
                                     President and Treasurer
                                     (Principal Financial and
                                     Accounting Officer)